The difference Between Metrics and KPIs: Do you want to evaluate the performance of your business? If so, it is essential to know the difference between KPIs and metrics: we know that KPIs are indicators, but are all indicators “KPIs”?
Difference Between Metrics and KPIs
Metrics are measurements that are not important to the business, while KPIs are indicators that are of interest to us so that we can check our performance and evaluate trends to see if our actions are right or wrong.
A Key Performance Indicator (KPI) is an indicator to show how we are progressing on a particular process or product and whether we are actually achieving our objectives.
Using these two terms interchangeably can be unhelpful in the design of your digital marketing strategy and confusing in the world of digital analytics. So in this article, we will delve into the main differences, the different types of KPIs and indicators, and how they can help you in your marketing plan.
What are KPIs?
Before we get into the solution, you need to know the correct way to name these values. Some websites incorrectly use the plural “KPI” to make KPIs easier to search on Google, but this is incorrect because there is no plural in English (the plural of SEO and CEO are incorrect as well, and SEO’s, or CEO’s, and (The plural of SEO and the plural of CEO are also incorrect and should be SEO’s or CEO’s.)
) It is important to use and be aware of the correct plural forms of English acronyms. For this reason, we will refer to them as KPIs in this article. With this in mind, let’s know what this number consists of.
What are the necessary conditions for a KPI?
Not as a KPI, because as stand-alone data, it is not a relevant indicator for our strategy. Other KPIs, such as revenue earned by the company, are quantified in euros or dollars, for example.
- To be useful, a KPI must “inform” > “control” > “evaluate” > “help”, and to do so, it must have the following qualities (SMART).
- Measurable, quantifiable: Since data is the value being provided, it must be measurable, or quantified, through the unit. Some are measured as a percentage for example.
- Concrete: What is measured must be specific, determined, and provide value. Vanity indicators that produce numbers without concrete results are meaningless. As an example of this, the number of “likes” for a publication number can be considered as an indicator.
- Time horizon: it should be quantifiable so that it can be compared on a weekly, monthly, quarterly, semi-annual, or yearly basis.
- Verifiable: it must be demonstrable, i.e., intrinsically related to our company and provide relevant data and its improvement or deterioration with other periods can be evaluated.
Which is the number of visitors who access a page and leave without navigating to another page or touching the content. Now that we know how to identify them, what are the advantages of using KPIs?
Benefits of using KPIs.
Being able to make decisions based on KPIs also allows you to make more accurate judgments, which reduces risk when implementing strategies.
- They show us if we are on the right track in terms of strategy, i.e..
- Quick and accurate decisions KPIs can show you the current state of the company.
- You can take a long-term view.
- You can stand out from your competitors.
Now that we have looked at the benefits of implementing KPIs in your strategy, let’s move on to the metrics. Allowing you to take quick action if something needs to be corrected or to take advantage of an opportunity.
What is a metric?
A metric is anything that can be measured, but does not have to be 100% related to the strategy.
They can be derived from one or several measurements. An example of an indicator is CAC (customer acquisition cost). This shows how much it cost to acquire a customer and consists of two indicators: total acquisition cost/number of customers.
Another example is the virality coefficient, which indicates how many new customers a single customer generates. It is interesting to know this indicator, especially in economic business.
Finally, this indicator cannot be considered as a KPI because it is not related to strategy.
Because if this indicator is positive, it can help to reduce the cost of acquiring new customers (CAC) and reach new audiences through other channels.